https://www.amazon.com/gp/help/reports/infringement

Don’t bother using it, seriously don’t bother. Now, I know many of my readers will not ever have a need for this because your copyrights are on content, not products, but products get copied too. Perhaps less often, perhaps that is the problem.

Amazon’s employees seem to me to be either willfully ignorant or woefully untrained as to the legal requirements put on them by the DMCA. I’m thoroughly convinced their web form is a time wasting smoke screen. Do you remember the TV show Lost? The Dharma Initiative had a monitoring station were people were supposed to watch something and record notes, they would put the notes in canisters and shoot them up an air tube like at a bank teller window. Later it was discovered this tube lead to a pile in the jungle – no one was reading the notes. This might be preferable to Amazon’s situation.

Regretfully as my business has expanded into tangible products I have had need to send DMCA notifications to Amazon, and I have used this form, and I have never had good service. Just about every single time they send me back a reply asking for idiotic additional information. Such as, and I quote:

Thank you for your message. If you have issues related to patent or design rights, please submit a notice of patent infringement using the contact information below.

In your notice, include:

1. The relevant patent numbers.
2. Your contact information
3. The ASIN(s) of the item(s) in question, located on a product’s detail page under the heading, “Product Details.”

Submit your notice to:

Amazon.com Legal Department
ATTN: Patents Team
P.O. Box 81226
Seattle, WA 98108
E-mail: patents@amazon.com
Fax: (206) 266-7010

Courier address:
Amazon.com Legal Department
ATTN: Patents Team
410 Terry Avenue North
Seattle, WA 98109-5210

No Amazon, I sent you a copyright notification, I don’t have a patent question. I very clearly said copyright, multiple times, and I was filling out a copyright form. This was, by the way, my second attempt in three days, the first attempt got this wonderful response.

Thank you for the information you have provided in your infringement complaint. However, we still need additional details regarding the items listed at the end of this message.

Before we can respond to your complaint, we ask that you clarify how these items infringe your rights by re-submitting your complaint with your answers to these questions:

1. Are you the manufacturer?
2. Do you believe the offers in your complaint do not match the product detail pages?
3. Do you believe that your trademark appears on products that you do not manufacturer?
4. Do you believe that your trademark is used inappropriately on the product detail pages?
5. Have you placed test orders? If yes, be sure to provide the Amazon order numbers.

You can re-submit your complaint using our online form located in the “Notice and Procedure for Making Claims of Infringement” section of our “Conditions of Use and Sale” page (http://www.amazon.com/gp/help/reports/infringement). You may use the Additional Comments field to provide your answers to the questions.

We look forward to hearing from you.

Seller Performance
Amazon.com

Now, I’ve been through this rigamarole before, for some reason they have this fetish for asking “are you a manufacturer” as if the DMCA act has a carve out where Online Service Providers are only obligated to act if a manufacturer sends in a notification. A DMCA notification is a legal document, the sender swears under penalty of perjury they own the legal rights to something, that is all that is required. But yes, I am a manufacturer. So in my original complaint to them, I said, twice, “We are a manufacturer.” So, I go back to the poorly trained employee thought, they are just that bad at reading comprehension?

Then they’re asking about trademark issues, which is just like the first message I quoted above, I say copyright, I’m on the copyright form, and they think I want to complain about trademark. When someone tries to sell a bootleg DVD of Frozen on Amazon does Disney have this trouble? Probably not. They do probably mostly get trademark complaints from places like luxury brands (Gucci, Prada, etc). But when someone is filling out the form for copyright, and say copyright, they probably mean copyright, right?

I’ve even personally got a pretty big gun, a registered copyright. In the US technically every creative work is copyrighted once it enters a fixed form, but if you register your copyrights you can get larger damages in a lawsuit. So when I’m sending in these complaints I send in my US Copyright Registration Number – they can literally look it up at the Library of Congress website and see my copyright filing – and they still ask me about trademarks and patents?

I got this other reply once…

Based on the information you provided in your complaint, we are unable to remove the listings you noted from these detail pages:

ASIN: (redacted)

Amazon respects a manufacturer’s right to enter into exclusive distribution agreements for its products. However, as the enforcement of these agreements is a matter of contract between the manufacturer and the distributors, it would not be appropriate for Amazon to assist in enforcing these agreements.

They thought I was complaining about some sort of contract dispute when I filled out a copyright claim form. It is almost as if the people they hire to answer these complaints have no legal training at all. They don’t realize products other than books, music, and movies can be copyrighted.

This is another one, from last fall.

Hello,

Thank you for your e-mail. Amazon respects a manufacturer’s right to institute policies and rules to manage and control the distribution of its products. However, Amazon considers the enforcement of these policies and rules to be a matter between the manufacturer and the retailers. As a result, it would not be appropriate for Amazon to assist in such enforcement activities.

We do not consider the use of a product’s name to sell that product to in any way constitute copyright or trademark infringement. However, if you believe any of your images or product information is being misused in a way that constitutes copyright infringement, please let us know which listings are of concern.

What you can do

Contact any seller directly though Amazon.ca’s website:

1. Select their storefront name
2. Click on the ‘contact this seller’ link in the lower right-hand corner.

If you believe the sellers you have reported are listing items that are not what they indicate them to be and have proof you’d like to share with us, reply to this message and let us know.

Include this information in your report, as relevant:

1. Explanation of the differences between the item description and what is advertised
2. Evidence in the item’s images or product descriptions that do not match what is being advertised
3. Amazon.ca Order ID of a test buy
4. The ASIN/ISBN of the item’s detail page and the product title
5. The store or business name of the seller you are reporting
6. Any other evidence that supports your complaint

So, what actually works?

One of the parts of the DMCA has online service providers register their registered agent with the US Copyright Office, so complainants need not have to guess where to send the forms. Using any company’s web based form is a favor to them. You can send them a fax or a letter instead. The DMCA Notification Tool on this website can help you make your form, and Amazon is in our database. If you’d rather generate and send the form yourself Amazon.com’s registered agent is:

Amazon.com, Inc. and its affiliates
Adrian Garver
1200 12th Ave. South,
Suite 1200
Seattle, WA 98144
Phone: (206) 266-4064
fax:(206) 266-7010
copyright@amazon.com

If you really want to get their attention registered mail or a courier with signature required is the way. If they then do not act, and you do have a valid copyright complaint. Get your lawyer ready, you can sue Amazon for copyright infringement (and they have deep pockets), if you have a registered copyright like mine and can show they acted willfully (and after so many ignored complaints, willfully would be an understatement) you can get punitive damages of $25,000 or more per product, and then get what is called treble damages (tripling). So, even more. Plus actual economic damages, court, and legal costs. But I have always had success with faxing this department.

So skip the web form. Make up our DMCA notification and fax it to Amazon, that is the best way to get a result.

[quote]Amazon is always looking for ways to help our sellers grow. We are excited to announce a new service: Amazon Lending by Amazon Capital Services, Inc.

Based on your Amazon selling performance you are pre-qualified for a loan up to $xx,xxx. Use these funds to purchase inventory and increase your sales on Amazon.com.

How the Amazon Lending loan works:

Register for a loan. Sign in with your Selling on Amazon Primary Account holder user id and password.
If approved, the funds will be advanced to your Amazon Seller Account within approximately five business days, and we will initiate a disbursement to your bank account on file.
Your Amazon Lending monthly payment will be automatically deducted from your Amazon Seller Account.
Go to Amazon Lending to complete your loan registration. You will need to sign in with your Selling on Amazon Primary Account holder user id and password. You may also sign into your Seller Central Account, look for the Amazon Lending offer in the right hand column of the home page and follow the links to “Learn more” and “Register.”

If you have any questions, please contact us at support@amazoncapital.com.

This offer expires on February 7, 2013. Registration for Amazon Lending is by invitation only.[/quote]

I find this interesting. As an Amazon shareholder I’m excited for the revenue potentials and it reminds me, quite frankly, of GE Capital. Amazon has gotten famous for getting really good at certain things, such as fulfillment, or Internet infrastructure and data processing, and then farming out their excess capacity. GE is famous for having really low corporate lending costs and then playing arbitrage by relending that money and making a profit on the interest rate spread. Not it seems as if Amazon is taking a page out of their own book and following GE into that same sort of thing.

On the other hand it also reminds me of relatively shady receivables lending. These companies want you to shift your credit card processing to them and then they’ll give you a loan financed by those credit card receipts, the terms are almost always horrible though and I feel as if they just prey on the desperate or the ignorant. What type of program Amazon is creating will depend on the interest rate, which I will check out and report back.

I may actually take advantage of this service. I have a manufacturing business now and while it is profitable it is capital intensive. Making a new product requires hundreds of thousands in upfront costs, and you don’t get that money back until it starts selling, enough capital to cover in between time, especially when you’re trying to do multiple products at once or otherwise expanding, can be difficult.

Update:

So, here are the terms they offered me.

12.9% APR with a 6 month repayment term, or 10.9% apr on a 4 month repayment term.

I do not think I’ll use it, I have existing lines of credit I can tap if need be at much lower interest rates. I also dislike the time limit “You must decide by February 7th.” That seems a bit like a high pressure sales tactic. This program may make sense for many sellers around the holidays, to help buy Christmas inventory, but we’re past that season now. In my opinion, at that interest rate, you need to have a lot more flexibility. I guess if you were a seller with no other access to short term credit it might make sense. I would only consider it if I exhausted my lines of credit and still needed more capital which at this point I do not think is likely.

I invest a lot in real estate, and of course in websites, and I see a lot of parallels. They are both properties that can provide almost completely passive income.

Where they differ is in price, and real estate, even today, after the crash, is far far far more expensive than a website, on an income valuation basis.

Even if you consider all investments, a website is one of the cheapest.

Now sure, some people will claim websites are cheap because there is risk. Well, where have you been the last two years if you don’t think there is risk in real estate, bonds, or equities?

Others will claim that managing a website requires time, and that is true, but how much depends largely on the type of website. A blog will languish without regular updates, and that will take time, a generic resource site though can coast on autopilot for years, earning you passive income.

A typical yield on a corporate bond might be 5%, a yield on a US Treasury bond is too low to even consider right now. A bond provides no protection from inflation, but also very low risk. A yield on a higher yielding equity can also be 5%, and that does include some protection from inflation, but the yield can also go down, so there is added risk. But you also have the chance for capital appreciation. The highest yielding equiting, REITs and MLPs and some Preferreds, might yield 10%.

A yield is how much of your initial investment you get back each year. So on $50,000 at 10% you would get $5,000 a year, at 5% just $2,500 a year.

There are also tax implications, the tax code is scheduled to change a big deal in regards to most of it so it probably isn’t worthwhile for me to give specifics, but if you’re in a higher tax bracket, in a couple years you may end up paying 44% of your dividends in taxes. It makes very little sense for investments to be the most highly taxed form of income (because then you’re just discouraging investment, which hinders job growth and business expansion) so I’m sure congress will act, but right now, that is what you’re looking at (before any state or local taxes too).

Now, with real estate. Most banks require 25% down for an investment property, and it is hard to make a profit on rent unless you’ve owned the property a long long time. So in general you break even on the rent and your profit comes from the equity you’re building as your tenants pay down your mortgage.

If your property costs $100,000 and goes up in value at 2% a year you’re gaining $2,000 a year (the first year) in additional equity. Meanwhile, if you’re on a say 30 year mortgage (at $75k) you’re also gaining equity of, on average (I don’t want to figure amortization for this example) $2,500 a year, as your tenants pay down your mortgage. Meaning your total equity gain is $4,500, or 4.5% of your total house value.

However you didn’t pay cash for the entire house, you used leverage, debt, to get it. So to calculate your true return on investment you take the equity gain vs. your downpayment or whatever you put into the property and that gives us an 18% yield. Way better than stocks or bonds.

You of course have to deal with being a landlord, which isn’t for everyone, but the potential for returns is much greater (so long as you don’t overpay in the first place, which is what so many people did during the bubble).

On the tax front, real estate acts as a tax shelter for people with lower to middle incomes, and even people in the highest tax bracket can still use it to shelter some income. So long as you don’t sell the property your tax exposure will be very limited to nothing. When eventually your loan is paid off you can even refinance and the bank will hand you a big fat check, which you can just pocket as return of capital, no tax required.

The big downside of real estate is that your money is locked up for decades, it isn’t a liquid investment.

So bonds get us 1-5%, stocks 5-10%, and our real estate example nets us 18%. What about websites?

Well, think of a website as a rental unit where you have no tenants to worry about, never have any vacancies, and where the rent is paid to you by advertisers or consumers doing shopping.

The typical valuation tossed around is two years of profits, which I find ridiculous for all but very speculative websites, unoriginal ones, ones just this side of copyright law (or breaking it), websites that have only existed for two years or less. 90% of websites you see for sale fall into this category, I don’t bother with them in general, but I suppose that valuation is fair for them.

But for legitimate unique established websites that valuation is way to cheap.

I recently bought a website for $50,000. The website should make at least $20,000 this year in profit, which is a little bit better than what the previous owner was getting but I added some content and some ad units (and will be doing more). In the end I paid about 3x yearly profits of what it was getting for him, or 2.5x what it will be getting for me. This website is a passive resource site that requires no regular updating or maintenance and that has been around for almost 10 years, with wide and varied sources of quality incoming links.

It is very easy to figure that I’m getting a yield on it of 40%, which kicks the pants off real estate and stocks. Why would my yield be so much higher? Because it is a riskier investment? If this were a bond and it was yielding 40% that would mean that most investors were predicting the bond issuer would go bankrupt within 3 years. What do you think is the chance that my website would lose 100% of it’s value in 3 years? There is hardly any one force that could remove 100% of a website’s value, even an across the board Google ban will still allow you to get traffic from MSN and Yahoo and whatnot, the website might still make money. And, since you’re buying a well established site, and assumingly not changing it a whole lot, what would be the risk of suddenly now for no apparent reason it gets a ban?

I got a good deal, and there were other bidders, who refused to pay more than 2x annual profits, they needed a 50% yield or nothing.

I regularly get offers to buy certain of my websites and they often limit themselves to this stupid metric as well, and I tell them no thanks. You have to think of opportunity cost. Suppose I own a website that makes $100,000 a year, and I’m offered $200,000 for it. Since I am not in debt and needing a bailout or otherwise am I distressed seller I have to think about what I could do with that $200,000. Leaving taxes out of it, I could invest that $200,000 in real estate and make a 20% return, but my money would be tied up in it, still, it’d be $40,000 a year in equity, and all the headaches of being a landlord. I could invest it in a bond or equity or something yielding say 5% and make $10,000 a year, completely passive, no work on my part, and some chance for capital appreciation.

Or, I can keep the website, let it yield 50% for me, and have chance for further capital appreciation.

This is not a hard decision, especially when the website in question doesn’t require regular updating (which is the case for most of my websites).

Even a dropship ecommerce business might not require more than 30 minutes of work a day, which is certainly worth maintaining a 50% yield.

I can’t explain the prices some websites sell for, my only thought it is must be a combination of distressed sellers, and of the fact that buyers need to be specialized. Anyone can buy a website, but 99% of the population doesn’t understand how to run one, so there is a knowledge barrier, and that allows investors to get a massive yield premium.

So, as I said in the beginning of this post, if you know how to do it, investing in websites is a good idea.

Oh, before I forget, on the tax front, websites are much like real estate. Assuming you have a logical business formation like an S-corp you will not need to pay medicare and social security taxes on your business income. You will also be able to depreciate the cost of your website purchase over time. The fact that the website is bound to make more money than the depreciation (which is unlikely with real estate) does mean it’ll increase your yearly tax burden, but that should be seen as a good thing, not a bad thing. The biggest difference is you’ll probably be unable to find a bank willing to finance the purchase of a website, so you can’t use leverage to goose your yield.

Typically the discount rate for qualified transactions is the headline you see when you sign up for a new merchant account, and sometimes providers will purposefully lowball you a lower qualified rate (2%), but hit you with a bigger non-qualified rate (4%), knowing that many more of your transactions will be processed at the higher rate.

Each provider has rules for what constitutes qualified and what constitutes non-qualified. Typically for an Internet merchant you must run an AVS (address verification system) check and run the CVV code from the back of the card for the transaction to be qualified, but even then. If the card is certain types of reward cards, or business cards, or from a foreign bank, you can still be non-qualified (this is how the banks fund their reward programs), and you can’t do much about that.

Now, pay attention, if you also send incomplete information to your payment processor, such as Authorize.net, you may also be downgraded to non-qualified. This is one of the reasons I have complained about Interspire and CubeCart not using the Authorize.net API fully. Just because a field isn’t required by Authorize.net for the system to work, doesn’t mean it isn’t needed by the merchant or otherwise would be beneficial to include.

I recently ran into this problem with one of my sites where I had a custom shopping cart developed. The developer did not set up the Authorize.net module to send an order ID with each transaction, and Visa apparently requires some sort of invoice ID (it can be meaningless and random, but it must exist) to be sent with each transaction, or they downgrade you. So I had been getting 100% downgraded Visa transactions. Lesson be learned, go over your statements carefully or it could cost you (it definitely cost me).

The fix was simple for my custom cart, but it was knowing it needed to be done that was key.

So, when using software, make sure you pass everything possible to your payment processor, even if you think it is redundant, even if it isn’t required, if you have the information, pass the information. And when signing up for a new merchant account, ask for the discount rate for non-qualified transactions as well.

The biggest factor in one-product ecommerce I believe is item quality. To sell just one thing that one thing has to be of high quality and unique. If you sell multiple items you can get away with selling both lesser quality and higher quality items and customers will make their decision based on price or another factor. If however you’re just selling one product you’ll need to make sure that product it of the utmost quality. You also have to make sure the product is one that can sell well and provide a reasonable profit as you will have fewer sales than if you had a catalogue of 200 products or more.

So, I decided to provide a step-by-step account of what I went through to launch this site in hopes that it’ll show others the path to do the same. Now if you all go out and make sites selling the exact same thing I’ll be a sad panda, but certainly use this to inspire you to go out and find your own product.

It all started with some shopping. I am a gardener, next to Internet stuff gardening is definitely my biggest hobby. I was looking around, again, for a good compost tumbler. The problem is I could always find things wrong with practically every one I saw. Then I stumbled upon the product that I am selling and it addressed literally all the problems I had with the other competing products. I thought to myself that this was a good quality product that I could sell, especially because it fits my criteria for choosing a product for ecommerce, and just incase you forgot, here it is again:

Chris’s Ecommerce Product Selection Criteria

• It has to be hard to find locally, or else no one will look online.
• It shouldn’t be carried by Walmart, or any other national retail chain, or else you will not be able to compete on price.
• It has to be durable and not prone to technical malfunction or breakage, or else you’ll deal with too many returns.
• It should be fairly expensive, so that you can make more profit per sale.
• It should be fairly expensive, so that people will look online for a good deal if they do find it locally.
• It needs to have a reasonable price to shipping cost ratio. If the shipping cost of a product is too large in comparison to the product’s purchase price the customer will not feel as if he is getting a good deal.

So I did some research and found out who manufacturers the item and contact them about wholesale policies. It turns out that they dropship mostly which is great for me considering having to pay for shipping to me, and then to the customer, would hurt my margins, and the boxes are huge and I’d need to buy warehouse space for storage.

Now at this point I would need to do other things had this been my first ecommerce site. I would have to form a business if I didn’t have one already, I would have to apply for an EIN from the IRS, I would have to register with my state to accept sales tax. If I didn’t luck out with the drop shipping I would have had to open up a UPS account and setup a daily pickup. Then maybe I’d buy some shipping supplies from Uline.com.

However I’m already setup for all of that, so all I really needed to do was get a domain, get the site made, and have a merchant account setup.

The first step was deciding on the site. I thought Garden Compost Tumbler would be best, and I even went so far as to do buy the domain, but then I did some keyword research and discovered that the second most popular compost keyword is “organic compost” so I decided to name my site Organic Compost Tumbler so that I could target both “organic compost” and “compost tumbler” with my title. This is just another good example of why you should always do keyword research. So I bought four domains, both the “garden” version and the “organic” version, and of each I got a hyphenated and non-hyphenated version.

Next I contacted John Conde, known to many forumites as Stymiee, about doing the development. The reason I selected John was because he could provide the whole package as he is an authorize.net certified developer, a merchant account reseller, and partner in a development company. So the work was done for $850, which included the merchant account setup fees. Then I also ran a $100 logo contest at GFXcontests for the logo.

If you include the domain and SSL the total cost to launch the site lands pretty solidly right on $1000.

With my profit margins I will only need 20-30 sales to makeup that cost, and after that I’ll make a nice profit. I don’t expect this site’s volume to be huge, but I do expect to earn at least 4 figures monthly off of it.

Promotion wise I plan to try something different. I will ask prominent garden bloggers if they will write an honest review of my tumbler in exchange for a free one. I’ll be more than happy to pay my wholesale cost for a tumbler to get that kind of exposure, even without considering the potential search engine benefits. Of course I also have my own garden blog that I’ll write a review on. I expect that once I do the links from my own sites, get the directory submissions done, and get reviewed by at least 5 bloggers I should get to the first page in the SERPs for my keyphrases, and eventually I hope to reach #1, though I’m sure that will take longer, perhaps a year.

I will be sure to update everyone with the progress of this site. I decided to make this project very transparent and open to let everyone see exactly how I go about doing what I do.

First update here.

The reasons for getting it in writing are many. If you do end up accepting it you will have a document showing the original offer if they try to renegotiate. However, this post is not meant to be a primer on purchase negotiations.

Rather, it is good to keep proof of what you have been offered for your business.

If you ever need a third party to value your business, perhaps for a credit or loan application, for instance if you were to open a business line of credit, then having a document showing a value for one of your websites or your business as a whole is a very good thing. I wish I had done this as I recently opened a business line of credit and trying to get these stuffy bankers to appropriately value my business was a huge pain. I had been offered $250k for one of my sites in the past, which was just barely over 12 months earnings at the time so I turned it down, but still, that small amount would have made a big difference to the bankers.

Also, you must think of your family. Often it is discussed in forums about what would happen if you died. You’re probably a one man business, or at the very least, you’re the only man (or woman) in your business that knows how to keep everything running. Many website publishers leave files of instructions on how to keep the business running, or how to dismantle and sell it. With a document such as described above you’re leaving your family a ready made buyer to contact about the purchase of your sites. It will make it that much easier for them if you are not around anymore.

Finally, if the day comes when you do sell your business, having prior offers that you can easily prove could help you negotiate a more favorable price. You may even contact the past bidders and try to get them to bid against the new one.

So next time someone emails or phones you about buying your business, ask for their offer in writing before giving an answer. You don’t need to justify your request, it isn’t that odd and they’ll merely assume you want to be legally thorough. Plus, if they balk, they probably were just jerking you around anyways.

I was having a discussion the other day with a colleague — someone in the website publishing business. He said his projected income for this year is around $50-$60k and we were debating over the point in his business in which he should begin outsourcing the majority of work. He believed that he did not yet make enough money to justify outsourcing — that it would spread his profit margins too thin and he had plenty of time to work himself, so, why not? When he reached over $100k a year, he said he would begin outsourcing.

In contrast, I believe you should begin outsourcing when you’re making $20k a year. Of course, profit margin would be slim to nothing while you’re outsourcing and making $20k a year — but you’ll also grow much, much quicker than the guy doing all the work himself making $50k a year.

So many website publishers on this forum have constantly stated that they have so many ideas but never get around to executing them. There’s a huge reason for this, but it’s not obvious to many: you don’t have enough time. You simply don’t have enough time to create several different profitable websites each month — you have to create the idea, design and code the layout, write the content, perform programming, and market the site.

So get somebody else to do it for you. Maybe a couple of people. Rates are cheap for all skills and labors — designing, content creating, programming, etc. As your sites generate more income, you can hire more talented and more reliable workers. You should use your time creating ideas and managing contractors, not in the trenches.